NEW YORK, NY - MARCH 6: A view of the Kushner Companies' flagship property 666 Fifth Avenue in Midtown Manhattan, March 6, 2018 in New York City. Kushner Companies, run by the family of White House senior adviser Jared Kushner, has been trying to raise funds for their $1.2 billion dollar mortgage on the building that is due in February 2019. The Kushners bought the property for $1.8 billion in 2006. Many real estate analysts say that they Kushners vastly overpaid for the property. (CREDIT: Drew Angerer/Getty Images)

The 41-story skyscraper at 666 Fifth Avenue in Manhattan was supposed to be Jared Kushner's signature investment. A 27-year-old Kushner bought the property in 2007 for a record $1.8 billion — the most ever paid for an office tower. The move was supposed to catapult the family real estate firm, previously known for mid-priced apartments in New Jersey, into the big leagues.

It has been an unmitigated disaster.

Shortly after the sale, the recession hit, depressing the commercial real estate market in Manhattan. To keep things afloat, Kushner was first forced to sell the building's lucrative retail space and nearly half of the office space to Vornado Realty Trust, a firm with much more experience in real estate.

But even that was not enough. The building is aging, and therefore is saddled with high vacancies and low rents. That means that instead of rent payments covering the mortgage, Kushner's firm and Vornado are having to pour in millions every year to stay current on the debt.

On the horizon is an even bigger problem. The full mortgage for the office space of about $1.2 billion becomes due in February 2019. Many real estate experts believe that the mortgage balance exceeds the value of the portion of the property still owned by Kushner, making refinancing a challenge.

Upon entering the White House, Jared Kushner divested the property only in the most technical sense. He "sold" the assets to his brother and a trust controlled by his mother. A lawyer described the transaction to the New York Times as a "shell game."

Now, with Kushner ensconced as a senior adviser in the White House, someone has emerged to bail him and his family out of this mess. The identity of Kushner's white knight is a mystery.

The $1.2 billion bailout

In a filing with the SEC on Friday, Vornado revealed the existence of an extraordinary "handshake" agreement that would not only refinance the $1.2 billion but allow the Kushners to buy out Vornado's portion of the debt. This means the Kushners would once again own the entire office tower and Vornado would own only the retail space.

Vornado SEC filing, April 6, 2018

The key question, however, is who would lend $1.2 billion to the Kushners to refinance an aging office tower with high vacancy rates? As of now, neither the Kushners nor Vornado is revealing who is facilitating the deal.

The existence of the deal, however, raise troubling questions about the whether it is based on the economic potential of the property or an effort to gain access and influence in the Trump White House.

The Kushners' international adventure

The office space in 666 Fifth Avenue is an unlikely candidate for traditional refinancing since it's probably not worth as much as the mortgage, which exceeds $1 billion. That has forced Jared Kushner and his family to get creative.

Days after the election in "a private dining room of the restaurant La Chine at the Waldorf Astoria hotel in Midtown Manhattan" Jared Kushner met with Wu Xiaohui, the chairman of Anbang Insurance Group, a mysterious Chinese company with links to the Chinese government.

A few months later, in March 2017, word of a potential deal between Anbang and the Kushner company leaked. The deal was "unusually favorable" to Kushner. It would have bought out Vornado, provided hundreds of millions in cash to Kushner, paid off most of the mortgage and embraced Kushner's vision to tear down the building and replace it with a new $4 billion tower that would convert the office space to residences. The deal eventually fell through, amid rising concerns about a conflict of interest.

The New Yorker reported that Kushner's father and sister met with Qatar's finance minister, Ali Sharif al-Emadi, in New York last April. They pitched a $1 billion investment to renovate the struggling tower. The Qataris rejected the pitch because they did not believe they'd ever be able to recover their investment. Soon thereafter, the Trump administration supported an economic blockade of the country by Saudi Arabia.

"Here's a question for you: If they had given Kushner the money, would there have been a blockade? I don't think so," a financial analyst opined to the New Yorker. NBC News reported that "Qatari government officials visiting the U.S. in late January and early February considered turning over to Mueller what they believe is evidence of efforts by their country's Persian Gulf neighbors in coordination with Kushner to hurt their country."

Kushner also met in December 2016with the chairman of Vnesheconombank, a Russian financial institution that is seen as a slush fund for Vladimir Putin. Kushner and the bank, known as VEB, have given conflicting accounts about what was discussed.

From White House access to real estate finance

Kushner has met repeatedly at the White House with leaders of financial institutions who later loaned his family company millions. He had multiple meetings, for example, with Joshua Harris of Apollo Global Management, supposedly about infrastructure policy. Late last year, Harris' company loaned the Kushner's $184 million to refinance an office tower in Chicago.

The Kushner firm also secured $325 million from Citibank after Jared Kushner met with Citibank's CEO in the White House.

His efforts to secure financing for his family's properties have also reportedly drawn interest from special counsel Robert Mueller

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